Block Settles With NYDFS for $40M Over Cash App Compliance Failures

Block, Inc., a financial technology company formerly known as Square, has agreed to pay $40 million to the New York Department of Financial Services (NYDFS). The settlement comes after regulators uncovered serious weaknesses in the company’s anti-money laundering (AML) program. This is particularly true within its Cash App platform, which allows users to send money and buy Bitcoin (BTC). Cash App Expanded Without Adequate Compliance Measures According to the NYDFS, Block’s compliance systems did not grow with the company. As Cash App expanded and began offering Bitcoin services, the systems meant to detect and prevent illegal financial activity were not strong enough. Investigators found that high-risk Bitcoin transactions were processed without proper review, allowing users to move funds anonymously. The investigation also revealed that Block did not have enough controls to check customer identities or assess the risk of certain transactions. These are key requirements for financial companies operating in New York. Block To Employ Measures to Oversee Compliance Improvements Block must hire an independent monitor to review its compliance systems and report back to regulators as part of the settlement. This ensures the company makes the necessary improvements and follows all applicable laws. The $40 million payment addresses past violations, but it is not Block’s first time paying such a penalty. Earlier this year, Block paid $80 million to 48 other state regulators over similar AML failures. Block has now stated that this agreement with New York marks the end of all its pending investigations with state regulators. Block Responds to Settlement Block did not admit to any wrongdoing in the settlement. However, the company stated that it has taken steps to improve its AML program. According to a spokesperson, Block has invested heavily in compliance resources. It was revealed the company had made necessary changes to strengthen its financial oversight, particularly within Cash App’s Bitcoin services. This case shows how important it is for financial technology companies to maintain strong compliance systems, especially when handling cryptocurrencies. As companies grow and expand their services, their responsibility to prevent money laundering and other financial crimes increases. New York and U.S. Regulators continue holding private firms and exchanges accountable. This is to ensure the safety and integrity of the financial system. The post Block Settles With NYDFS for $40M Over Cash App Compliance Failures appeared first on TheCoinrise.com .

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